Gap Inc. said Tuesday (Nov. 24) that it enjoyed a 61 percent jump in online sales during its fiscal third quarter ended Oct. 31 — offsetting a 20 percent fall in in-store sales due to the ongoing pandemic. The retail giant also said that its Athleta chain’s sales rocketed even as revenues plunged at Banana Republic Global.
“With our teams focused on sales growth and returning to profitability, we’ve made investments in demand generation that are driving engagement, particularly in this dislocated market as customers are looking to trusted brands to provide easy and safe shopping options,” Gap Inc. Chief Executive Officer Sonia Syngal said in announcing the results.
Management said results at its flagship Gap Global division included a formidable digital performance that partly offset decreased brick-and-mortar presence and lower physical traffic trends. But all in, Gap Global’s net sales dropped 14 percent year over year, with comparable sales for the brand falling 5 percent from Q3 2019.
Banana Republic Global fared even worse, with net sales plunging 34 percent year on year for the quarter. However, management said that was a “slight improvement” from Q2.
Management said that Banana Republic is continuing to focus on acclimating to shopper preferences and bolstering inventory mix by moving away from the label’s usual workwear selection and into casual fashion in the “current stay-at-home environment.”
On the plus side, Athleta’s sales jumped 35 percent year on year, with comparable sales rising 37 percent to the highest level in the brand’s history. Sales at the company’s Old Navy Global unit likewise rose 15 percent, with comparable sales up 17 percent.
“Old Navy continued to experience meaningful acceleration in its online business as strong customer response to product was further bolstered by compelling and relevant digital marketing investment,” management said.
Gap added that it finished Q3 with $2.6 billion in cash, cash equivalents, and short-term investments — way up from $1.1 billion at Q3 2019’s end. Management added that Gap ended the latest quarter with 3,785 retail locations in 43 nations, including 3,178 company-operated stores.
As for its overall results, Gap reported 25 cents earnings per diluted share on $3.99 billion in net sales. That fell short of analyst estimates of 32 cents per share in earnings but came out ahead of a $3.82 billion forecast in revenue.